Washington (Platts)--13Jun2008

Five US senators introduced a bill Thursday that would empower the
Commodity Futures Trading Commission to regulate oil and other energy
commodity trades carried out in the US on international exchanges, much as
CFTC now oversees trades on US exchanges.

Senators Carl Levin of Michigan, Dianne Feinstein of California, Dick
Durbin of Illinois, Byron Dorgan of North Dakota and Jeff Bingaman of New
Mexico, all Democrats, called the bill the "Close the London Loophole Act."

They said it would complement a measure enacted by Congress earlier this
year that authorized the CFTC to police US electronic exchanges for price
manipulation and excessive speculation.

"Closing the London loophole would ensure that our government has what it
needs to protect American markets from manipulation and excessive speculation,
no matter where US energy commodities are traded," Levin said in a statement.

"There is a frenzy of speculation in the energy futures market," Dorgan
said. "While American consumers are paying sky-high gas prices, speculators
are raking in money hand over fist."

The bill targets contracts traded in London, and elsewhere around the
world, such as ICE Futures Europe's West Texas Intermediate oil contract,
which is regulated by the UK's Financial Services Authority.

Currently, the CFTC obtains information on US energy trades on
international exchanges only through voluntary data-sharing agreements with
other regulators. In many instances, the senators said, the commission can
take action on such trades only with the cooperation of another regulator.

The bill would give the CFTC legal authority to obtain trading data from
international exchanges operating in the US through direct trading terminals,
the senators said.

In addition, the bill would require the agency to obtain agreements from
international exchanges before allowing them to establish direct trading
terminals in the US.

Those agreements would require the exchanges to impose speculative limits
and reporting requirements on traders of US energy commodities comparable to
those imposed by the commission on US exchanges.

That provision is also the subject of a narrower bill introduced earlier
this year by Levin and Feinstein.

The five senators' bill is the latest in a flurry of measures introduced
or proposed by lawmakers targeting speculation in oil and other energy
commodities markets.

Among the others was one introduced earlier Thursday by Senators Maria
Cantwell, Democrat-Washington, and Olympia Snowe, Republican-Maine, that would
require ICE Futures Europe to register with CFTC as a "designated contract
market" and allow the commission to regulate all US oil futures markets.